(1)(a) A utility is
entitled to fully recover the costs that it prudently incurs in executing an approved
emission reduction plan, including the costs of planning, developing, constructing,
operating, and maintaining any emission control or replacement capacity
constructed pursuant to the plan, as well as any interim air quality emission control
costs the utility incurs while the plan is being implemented.
(b)The general assembly finds that the emissions reductions under this part
2 are being made to assist the state of Colorado to comply with current and
reasonably foreseeable emission restrictions under federal law. To provide this
assistance, the utility is being asked to make substantial capital investments and to
enter into substantial contractual commitments in an expedit
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(1) (a) A utility is
entitled to fully recover the costs that it prudently incurs in executing an approved
emission reduction plan, including the costs of planning, developing, constructing,
operating, and maintaining any emission control or replacement capacity
constructed pursuant to the plan, as well as any interim air quality emission control
costs the utility incurs while the plan is being implemented.
(b) The general assembly finds that the emissions reductions under this part
2 are being made to assist the state of Colorado to comply with current and
reasonably foreseeable emission restrictions under federal law. To provide this
assistance, the utility is being asked to make substantial capital investments and to
enter into substantial contractual commitments in an expedited time period outside
of the normal resource planning process.
(2) (a) If a public utility's wholesale sales are subject to regulation by the
federal energy regulatory commission, and if the public utility sells power on the
wholesale market from a project developed pursuant to the plan, the commission
shall determine whether to assign a portion of the plan cost to be recovered from
the public utility's wholesale customers. The commission may make such
assignment to the extent that it does not conflict with the public utility's wholesale
contracts entered into before April 19, 2010.
(b) Except as specified in paragraph (c) of this subsection (2), if the
commission makes an assignment of costs pursuant to paragraph (a) of this
subsection (2) and if the utility applies to the federal energy regulatory commission
for recovery and pursues that application in good faith, then:
(I) To the extent that the federal energy regulatory commission does not
permit recovery of the allocated wholesale portion of plan-related investment, the
commission shall approve retail rates sufficient to recover such disallowed
wholesale portion of the investment through the recovery mechanism detailed in
this section; and
(II) The public utility may not recover any revenue shortfall caused by a delay
in making any filing with the federal energy regulatory commission or due to any
rate suspension period employed by the federal energy regulatory commission or
because the public utility failed to pursue recovery of the amounts at the federal
energy regulatory commission in good faith.
(c) If the public utility fails to apply to the federal energy regulatory
commission within six months after the commission's final order assigning a portion
of the plan's costs to the public utility's wholesale customers, the public utility is
not entitled to recover the assigned portion of the costs from its retail customers.
(3) Current recovery shall be allowed on construction work in progress at the
utility's weighted average cost of capital, including its most recently authorized
rate of return on equity, for expenditures on projects associated with the plan
during the construction, startup, and preservice implementation phases of the
projects.
(4) To the extent that an approved plan includes the early conversion or
closure of coal-based generation capacity by January 1, 2015, and to the extent that
the utility demonstrates that a lag in the recovery of the costs of the plan related to
the investment required by such plan contributes to a utility earning less than its
authorized return on equity, the commission shall employ rate-making mechanisms,
in addition to allowing a current return on construction work in progress, that
permit rate adjustments, no less frequently than once per year, without requiring
the utility to file a general rate case to allow recovery of the approved plan's costs.
Such rate-making mechanisms may include a separate rate adjustment clause,
regular make-whole rate increases, or other appropriate mechanisms as
determined by the commission.
(5) During the time any special regulatory practice is in effect, the utility
shall file a new rate case at least every two years or file a base rate recovery plan
that spans more than one year.
(6) The commission shall allow, but not require, the utility to develop and
own as utility rate-based property any new electric generating plant constructed
primarily to replace any coal-fired electric generating unit retired pursuant to the
plan filed under this part 2.